The Tax Man Cometh Thrice This Year

I hate the weeks leading up to April 15 when I have to prepare and file my tax returns. I start worrying about taxes in January, but don’t start doing anything until February. Or maybe March. Then the days between the Ides of March and Tax Day turn frenetic.

In prior years I have always prepared our joint tax return myself. The federal return. The Missouri state return. Because my husband’s law firm has an office in Kansas, we have to file in that state also. And Kansas City, Missouri, where we have lived for the last thirty-five years, requires a local return for its earnings tax also.

Even though I fret for weeks about getting the returns prepared and filed, in the approximately thirty years since my husband became a partner in his law firm, I have never been able to finalize the documents until he received his Form K-1 from the partnership. That never happened until the end of March or early April. So most of my fretting time was wasted.

When my husband inherited farm land from a grandparent about twenty years ago, I did insist that he prepare the farm income and expense forms, including depreciating the cattle. (Did you know there is a difference between the taxation of feed stock and breed stock? Only breed stock are depreciated. Feed stock are expensed.) But though my husband took on the farm calculations, I have had to nag him to get the task completed. Which was not conducive to marital harmony.

For the past ten to fifteen years, I have used TurboTax software. I got pretty good at knowing what portions of the questionnaire to complete and which sections were easier to fill out using the IRS forms themselves. With TurboTax, although I hated the process, I was in control.

Every so often in the last ten years or so, as our financial situation became more complex, my husband would suggest hiring a CPA to do the returns, but I resisted. After all, if two competent attorneys could not prepare their own taxes, then there was something wrong with the system, I argued. (Well, there is something wrong with the system, but I still took pride in doing it myself. And in maintaining control.)

I am not an organized record keeper. I know where things are (mostly), but they are not filed neatly. I liked being able to do the tax returns piecemeal—input the 1099s today, the charitable contributions tomorrow, the tax payments next week. And wait for that blasted K-1 to appear at the last minute. If we used a CPA, I’d have to gather all the records sooner, I rationalized.

But our finances and the tax laws are only growing more convoluted, and I’m not getting any younger. And I hate it so much. This year, having someone else responsible finally sounded like a good enough idea to be worth the expense. Besides, the cost of the accountant is deductible. So last fall, we pulled the plug and hired a CPA firm to do our 2014 tax returns.

Unfortunately, by delegating responsibility for the preparation of the returns, I lost control. As I had suspected, I still had to pull together all the information from my haphazard files. I still had to nag my husband to get the farm documentation completed. And we still had to wait for the blasted K-1, which we didn’t receive this year until April 6.

We didn’t receive any draft of our returns until the morning of April 14. That was the first time I saw how much we owe this year. (It’s bad. Not unexpected, but bad.) I went through the returns and passed my question bad to the CPA. As of 7:30pm on April 14, the CPA recommended we seek an extension, which he would handle for us.

I hate getting extensions, which my husband and I have only done once before. But rather than send out a potentially erroneous filing, I agreed to the extension.

Even with an accountant on my side, the weeks leading up to April 15 still stink. (I could use stronger language, but I want to keep this blog family-friendly.)

One tax envelope from my father, as of his death on January 5

Making my tax woes even greater, this year I have been responsible for the returns of three taxpayers—not only all the returns for my husband and me, but also a joint return for my parents covering my father for all of 2014 and my mother until her death in July, and another return for my mother’s estate covering the estate income and expenses after she died.

Fortunately, unlike me, my father was a very organized record keeper. He died on January 5, but had already gathered all his deductions for last year. He had one envelope for medical receipts, with a Post-It stuck to it listing his mileage for all the doctor’s visits he made for both himself and my mother. He had another envelope for charitable contributions. He had printed out a record of all his bank transactions from Quicken by category.

All I had to do was add everything up and wait for his W-2s and 1099s.

Well, it wasn’t really that easy. I also had to divide the income between the joint return and the estate return. And determine which expenses went with which return. And hope that another 1099 didn’t trickle in late or that I had misinterpreted any of his Quicken records.

Thankfully, he had an accountant he had worked with for the past few years. None of my questions fazed her, and she was comfortable with the decisions I made in allocated expenses between the joint and estate returns. Still, I had to familiarize myself with her process, which, of course, wasn’t the same as the process my new accountant used. Similar, but not the same.

So I have had a crash course this year in how accountants handle tax preparation. I’m not sure whether I prefer the control I had with TurboTax or the delegation to the accountants, which requires as much record keeping and retrieval as doing it myself, though they do do the grunt work.

Truth be told, I’d prefer to delegate the grunt work AND retain control, but that is never the way things work. Delegation, by definition, involves a loss of control.

At this point, I’m just hoping we get the information from the accountant in time to file on April 15 without seeking a last-minute extension.